Why Canopy Growth Stock Crashed on Friday
Canopy Growth (NASDAQ: CGC) stock collapsed in morning trading Friday, down 20.5% through 11 a.m. ET after the company reported a comically bad earnings miss.
Heading into today's report, analysts forecast the Canadian cannabis company would lose $0.20 per share in its fourth quarter of fiscal 2025. Instead, Canopy Growth reported a loss of (better sit down for this) $1.32 per share.
Canopy Growth's gigantic Q4 miss
Investors were not amused.
Canopy management tried to put a brave face on the results, leading off its report by noting Canadian sales, at least, grew 4% year over year, and Canadian medical cannabis sales in particular grew 13%. CEO Luc Mongeau noted further that he has taken "decisive actions to accelerate growth and profitability by unifying our medical cannabis businesses globally" (even though he highlighted cannabis sales in Canada separately).
He also argued Canopy has made "marked year-over-year improvement in Adjusted EBITDA and cash flow in FY2025," and remains "committed to achieving positive Adjusted EBITDA in the near-term and positive Free Cash Flow over time."
But Canopy is not there yet.
Is Canopy Growth stock a sell?
Globally, Canopy's sales fell 11% in Q4, and free cash flow was negative $36.2 million. For the full year, sales were down 9% and FCF was negative $176.6 million.
Viewed in the most favorable light, therefore, one could argue that at least cash burn is decelerating at Canopy (four quarters of $36.2 million cash burn would imply a FCF run rate of only negative $144.8 million). But sales growth is still negative, and it got even more negative in the year's final quarter.
Sorry, folks. I just can't find a reason to want to own Canopy Growth stock until this trend improves.
Should you invest $1,000 in Canopy Growth right now?
Before you buy stock in Canopy Growth, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Canopy Growth wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!*
Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of May 19, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CTV News
23 minutes ago
- CTV News
'People being on the street, people living here': Richmond Row office building is being converted to apartments
The city partnered with Farhi holdings to turn Richmond Row office space into apartments, reports CTV's Gerry Dewan. The city partnered with Farhi holdings to turn Richmond Row office space into apartments, reports CTV's Gerry Dewan. London's mayor Josh Morgan announced a new office-to-residential conversion on Tuesday. It's the city's third such project for the city, this one a partnership with Farhi Holdings. Work is already underway at 685 Richmond Street where they are taking almost 32,000 square feet of office space and converting it into 41 residential units that will house approximately 80 people. 060325 - housing Third office-to-residential project announced by the city. (Gerry Dewan/CTV News London) According to Morgan, 'In the long run, people being on the street, people living here, are what supports the businesses in the area.' The offices in the four-storey building have been mostly empty for five years. Total office vacancy rates in the downtown have reached about 32 per cent, according to analysis from CBRE Limited. Morgan says the office conversions address three issues -- office vacancies, the demand for affordable housing and the goal of maintaining a vibrant downtown core. 'The people who are going to live in this building are going to walk out the doors to support the businesses and the downtown core. They're going to have opportunities to work in the downtown core as well,' said Morgan. 060325 - housing Third office-to-residential project announced by the city. (Gerry Dewan/CTV News London) Ilias Korakianitis and his family members operate Dimi's Greek House, an eatery located close to where the conversion is taking place. He told those gathered for the announcement that having more downtown residents, along with increased policing and street maintenance, could bring significant improvements to the core. 'If we want downtown to come back to life, we need leadership. We need support, and we need urgent action,' he said. Farhi Holdings owner Shmuel Farhi says the conversions also prevent buildings from falling to the wrecking ball. 'Every building we adapt saves tons of concrete, glass, steel from the landfill,' said Farhi. The city has provided economic incentives amounting to about $35,000 per residential unit. Farhi told CTV News incentives are necessary because the conversions aren't easy or cheap, pointing to the heating system as one example. 'The heating that was for an office wasn't conducive to heating for residential. So that's another million dollars that we have to put there,' he said. 060325 - housing Third office-to-residential project announced by the city. (Gerry Dewan/CTV News London) Morgan said the money comes from the $85 million Housing Accelerator Fund which is supported with money from the federal government. He said more downtown residential conversions are coming, including a proposed 35 storey tower planned for the southwest corner of Oxford and Richmond, where retailer Urban Outfitters was once located. That project is being spearheaded by Toronto developer Fitzrovia Real Estate.
CTV News
35 minutes ago
- CTV News
Eby's trade mission continues
Eby's trade mission continues Day two of the B.C. premier's trade mission to Asia included a stop in Osaka and meetings with investors in energy and critical minerals.
CTV News
39 minutes ago
- CTV News
‘Do the right thing': Ostrich farm facing cull order urges CFIA to allow birds to be tested
Katie Pasitney is shown in this photo on her family's ostrich farm in Edgewood, B.C. The fight to stop hundreds of ostriches on a B.C. farm from being culled after an avian flu outbreak earlier this year could end up in court again. The family that owns Universal Ostrich Farms in Edgewood said they will appeal a judge's earlier decision that sided with the Canadian Food Inspection Agency. 'We are moving forward with an expedited case management conference and seeking that emergency stay order once again,' said Katie Pasitney, daughter of the farm owners. She said supporters from across the country continue to show up at the farm, concerned for the fate of close to 400 ostriches. 'We have people just watching the highways to give notice if they see a long caravan of RCMP and people coming,' she explained. The Canadian Food Inspection Agency did not make anyone available to speak to CTV News Tuesday, but said in a statement last week that is continues to plan for the 'human depopulation' of the birds after 69 of them died of avian flu. But the farm said they haven't had a sick bird in more than 145 days and are calling on the CFIA to allow for independent testing. 'We've been living shock and trauma for five months, just asking (the CFIA) to do the right thing, which is test. Test the animals,' said Pastiney. The inspection agency has fined the farm $20,000 after it said the farm 'failed to undertake appropriate biosecurity risk mitigation measures' and didn't report the initial cases of illness. It's something the farm denies. 'We absolutely reported it,' said Pastiney. 'We called our vet. We did our due diligence,' she said. The CFIA also said, 'Allowing a domestic poultry flock known to be exposed to HPAI to remain alive means a potential source of the virus persists. It increases the risk of reassortment or mutation of the virus, particularly with birds raised in open pasture where there is ongoing exposure to wildlife.' 'We do not pose a health risk. We know it,' said Pastiney. She also refuted CFIA claims that the farm did not provide evidence of scientific research and said the information was providing in meetings. The devastating toll of avian flu has seen more than 8.7 million birds culled in B.C. Universal Ostrich is fighting to stop their birds from being added to that count.
